Jean-Marc Germain, CEO of Constellium, one of the world’s largest aluminum producers, issued a strong warning to the European Union.
Calling on him to abandon the impending borderline carbon tax,
known as the Carbon Limit Adjustment Mechanism (CBAM).
German stressed that this tax puts the European aluminum sector
at risk of sliding into a “slow and long-term decline”.
He pointed out that it increases costs for local producers and leads to
a preference for foreign suppliers who are more polluting to the environment.
Aluminum and its impact on competitiveness
The aim of the CBAM mechanism, which will begin to be applied to some goods starting in January, was
It is to protect European aluminum producers from cheaper competition
from countries with less stringent climate regulations.
However, German believes the tax is counterproductive, telling Reuters:
“We are shooting ourselves in the foot.”
We are aware of that. European competitiveness is at the heart of the matter.
The CEO stressed that the cost inflation resulting from the tax
would be “a death with a thousand wounds”.
This is for Constellium’s industrial customers throughout Europe
(such as the aviation, automotive and packaging sectors).
Environmental vulnerabilities
German also criticized the mechanism’s environmental effectiveness,
pointing to loopholes that allow foreign suppliers to avoid the tax.
Such as shipping scrap or supplying low-carbon aluminum to Europe
while continuing to produce the high-carbon metal in other regions.
He said: “This does absolutely nothing for the planet.”
German warned that the negative effects of CBAM would not be felt immediately,
But in the long run, it will lead to companies shifting
their investments outside the continent.
And a gradual shutdown of European production capacities, especially aluminum.
He concluded by saying: “It won’t be a sudden switching off of the lights,
but rather a gradual deterioration.”
